How much approximate amount will be received on a principal of ₹40,000 at the rate of 8% per annum to be compounded half yearly at the end of one and half years?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. ₹44,995.
Principal p = 40000
Rate of interest r = 8% = 4%( Half yearly)
Time n = 1.5 years = (3 years half yearly)
Amount = P[(1 + r/100)]n
= 40000[(1 + 4/100)]3
= 40000[(26/25)]3
= Rs 44994.56